Economics Principles Answer Question 2022

Running head: ECONOMICS PRINCIPLES
Economics Principles
Name of the Student
Name of the University
Author Note

ECONOMICS PRINCIPLES
1
Table of Contents
Answer to question 1.......................................................................................................................2
Answer to question 2.......................................................................................................................3
Answer to question 3.......................................................................................................................5
Answer to question 4.......................................................................................................................6
Answer to question 5.......................................................................................................................6
Reference List..................................................................................................................................6

CS
C
S
PS
Suppl
y
Demand
Price ceiling
Medicine
output
Medicine Price
P0
Q
1
P
ma
x
Q0 Q2
ECONOMICS PRINCIPLES
2
Answer to question 1
Figure 1: Price ceiling impacts on Medicine market
Source: (as created by the author)
As per the article, the government of Philippines has imposed a price ceiling on 120
prescription medicines including hypertension, cardiovascular disease, diabetes, chronic lung
diseases and cancers (Rappler 2020). As a consequence of that, average medicine pric is
expected to be declined by 56% as compared to the current price level.
As per the researchers, this lowering medicine price will enhance the consumer demand
as it reduces the meduicune expenditure for the general people.
The supply quantity will be improved in response to the improvement in the market
demand. However, the producer surplus will be minor in comparison with the consumer surplus.
The profit level decreases for the producers.